How to use Support and Resistance Effectively - page 30

Sundowner
76
Sundowner  

Hi Bubble,

Here's what confuses me. I am noticing too many instances of what I think are S/R.

Please have a look at the chart when you get a chance.

I'm seeing potential S/R at the places indicated by the dotted lines. The S/R you used is the solid line. I can see that as S/R. If you wouldn't mind, I'd appreciate a brief explanation of why the lower dotted line is not S/R.

Many thanks

Files:
eurjpy_9.gif 17 kb
fx2007
10
fx2007  

Bubble

At the bgeinning of the thread you posted about your 3 classes of trend. How does identifying which trend you are in effect your trading ? (What difference does it make to our interaction with the market).

FX2007

There 3 types of rising trend ,these are

NORMAL TREND

CREEPING TREND

BLOW OFF TREND

A NORMAL TREND is when the price is making a series of rising peaks and troughs and the price does not move substantially into the range of the previous peak quite often in a normal trend the price will come within a few pips of the previous peak before turning back up again these are great opportunities to trade with the trend.

A CREEPING TREND is when the price is making a series of rising peaks and troughs and the price moves back into the range of the previous peak but not as far as the previous trough and then turns back up ,its quite normal to find this type of trend at the beginning of a very good trend.

A BLOW OFF TREND is when the market is making a series of rising peaks and troughs and the price does not come close to the previous peak creating a gap, these normally occur near the end of a normal trend and usually are a very fast move .Its important to check the higher timeframe with this type of trend because sometimes what looks like a BLOW OFF TREND can be a retest of a peak on the highertimeframe so its important to distinguish between the two in order to know where to set the profit target.

REVERSE EVERYTHING FOR DOWNTREND

speres
19
speres  

Bubble, what a great thread i've just come accross, i've been trying to use support and resistance for quite a while now and have had some success last few years.

Your time and efforts are most appreciated.

XKR1962
60
XKR1962  

Trading higher timeframes

bubble:
Dave ,

you are absolutely right in your post above,however s/r can be traded from any timeframe using the same principles ,however the smaller the timeframe the more difficult it gets .

The trades i have posted are from the 15min with confirmation from the 60.

Although 15/60 is not my preferred combination due to the higher stress levels involved from more frequent monitoring, there where some great trades which carried a high risk reward ratio and visually were worth posting for you to learn from as the principles of s/r are the same no matter which combo is used.

bubble

Hi Bubble,

I noticed that you prefer to trade higher time frames than the 15/60 min. May I ask are the principles the same or are there additional factors to take into consideration. Like trading across news articles etc.

I took what looks like a near perfect setup on the EUR/CAD in H4 yesterday. I'd appreciate your comments, good or bad.

Brilliant thread, thanks as always.

Files:
XKR1962
60
XKR1962  

Hi Bubbles,

thanks for the quick reply. My bad, I guess I need to concentrate more on what you are telling us here. I will re-read everything again.

Thanks for clarifying trading S and R in the higher time frames.

I am truly amazed by your patience and the fact that you are prepared to help us all this way....you are an inspiration. Thanks again.

mietectec
35
mietectec  

Hi Bubble,

Continuing from Mairangi case, I'm trying to learn if I can understand where to put the levels on the right of the chart. Could you please comment on this matter and explain your reasoning ? On the chart below, I'm playing a what-if scenario, that if the price trend up:

1. Have I correctly place the next Support (dotted red) ? My reason for this line is that this was the the Support on 4HR swing down correction, as indicated by the Gold rectangle.

2. If that was the right Support, then the entry will be at the touch & bounce up of the dotted red line ?

3. Have I place the right target (gold solid) ? The reason is that this was the high on 4HR (on gold rectangle).

I'm still confuse with another potential RBS, as illustrated by the second picture. In this case:

1. The next Support/SBR will be at the last new High. This would be similar to the condition of last trade on Mairangi case.

2. After a new HL is confirmed and a new HH is formed,the entry will be where it bounce back (after second time?) on that RBS.

3. Target is still the same for the same reason above.

speres
19
speres  
mietectec:
Hi Bubble,

Continuing from Mairangi case, I'm trying to learn if I can understand where to put the levels on the right of the chart. Could you please comment on this matter and explain your reasoning ? On the chart below, I'm playing a what-if scenario, that if the price trend up:

1. Have I correctly place the next Support (dotted red) ? My reason for this line is that this was the the Support on 4HR swing down correction, as indicated by the Gold rectangle.

2. If that was the right Support, then the entry will be at the touch & bounce up of the dotted red line ?

3. Have I place the right target (gold solid) ? The reason is that this was the high on 4HR (on gold rectangle).

I'm still confuse with another potential RBS, as illustrated by the second picture. In this case:

1. The next Support/SBR will be at the last new High. This would be similar to the condition of last trade on Mairangi case.

2. After a new HL is confirmed and a new HH is formed,the entry will be where it bounce back (after second time?) on that RBS.

3. Target is still the same for the same reason above.

On your chart i would put resistance at 2.0375 ish so the breakouts allready happened, and await a test of that new support level.

I may be wrong as i'm pretty new to this also, its just my interpretation, look forward to Bubbles analysis.

downunderdave40
156
downunderdave40  

Invalidate The Down Trend

Hi Bubble,

I just wanted to make sure that I am understanding when a trend becomes invalid. Here is a picture of the 1hr CAD. First off, if I have identified the S&R levels and Highs and Lows correctly then it looks like we have a down trend in place.

If I understand the Pring PDF document correctly, when price crosses the magenta line and forms a new high peak followed by a higher low trough above the magenta line then the down trend is no longer in place (A). If the price continues down below the aqua line and forms a new LL followed by a LH then the down trend remains intact (B). I want to make sure I understand this concept, so please correct me if I am wrong.

Dave

jerrydeng
42
jerrydeng  
downunderdave40:
Hi Bubble,

I just wanted to make sure that I am understanding when a trend becomes invalid. Here is a picture of the 1hr CAD. First off, if I have identified the S&R levels and Highs and Lows correctly then it looks like we have a down trend in place.

If I understand the Pring PDF document correctly, when price crosses the magenta line and forms a new high peak followed by a higher low trough above the magenta line then the down trend is no longer in place (A). If the price continues down below the aqua line and forms a new LL followed by a LH then the down trend remains intact (B). I want to make sure I understand this concept, so please correct me if I am wrong.

Dave

i 'm also confused on labing H,L,HL,HH etc. but i think your understanding in this chart is right.

RickW00716
733
RickW00716  

I am learning a lot from this thread...finding the sup/res is becoming easier and even trading with the higher TF trend is easier....

I am still working on the entries though...I want to enter as close to the sup/res line(s) as possible...I don't know if I should try to use some sort of indicator on the 5 or 15 min chart or if I should just look at the bars themselves...

Anyone have suggestions/techniques?